Is the Energy Efficiency Service Market Still MUSH?

0

We hear a lot about energy efficiency these days, but who is actually pursuing it?

In recent years most of the big players that install efficiency measures, the energy service companies (ESCos), have found work largely in the MUSH market: municipal and state governments, universities, schools and hospitals. In fact, a report in June 2010 by Lawrence Berkeley National Laboratory and the National Association of Energy Service Companies found that MUSH made up 70% of the work done by ESCos.

Private businesses, on the other hand, were backing away from making energy efficiency improvements when the report was written. A year has passed. Is the market still MUSH?

I looked at the projects announced by the big players in recent months. Here’s a sampling of a few.

* Ameresco struck deals with the Greensboro Housing Authority, Boston Housing Authority, state of Alaska for public university buildings, New York State School District, Penn State University and City of Portland, Maine.

* Chevron Energy Services is bringing efficiency to East Side Union High School District in San Jose, California; North Carolina Central University; the city of Victoria, Texas; as well as Orange County, California and Santa Monica College.

* Noresco is working with the state of Hawaii, Fort Worth Naval Air Station, the Allendale County Schools in South Carolina, Capitol Hill and Elkhart County, Indiana.

* And on and on as I made way down the list of large ESCos.

My very unscientific survey indicated that MUSH still predominates. And that’s not a bad thing. The MUSH market certainly has a lot of room for energy savings. And federal-stimulus dollars and state clean energy funds are available now particularly for government-backed institutions.

Fewer financial incentives are available for businesses. But even when money is offered, small to medium-size businesses are harder to sell on energy efficiency, especially now. Even if an energy efficiency project offers a quick payback, businesses are reticent to make any initial capital investment. Or in a lot of cases, it’s hard for energy efficiency companies to even get a meeting with busy business people, especially in an economy that has left so many paddling furiously to stay above water.

The state of New York is attempting to crack the business market. One program, funded by the New York State Energy Research and Development Authority (NYSERDA), tries to make it easier for small businesses to analyze building energy usage.

Few best-of-class monitoring technologies exist for the small business market. But the project uses a combination of inexpensive Onset data loggers and NorthWrite’s Energy Expert Plus, an information management software and service that gathers, analyzes and displays data about a building’s energy performance. The monitoring systems feed the information into NorthWrite software, where it is modeled with inputs, such as utility rates, weather and building characteristics. An analyst studies the report and provides the building manager with recommendations on energy upgrades that will achieve 10% to 15% annual energy savings. Next, NorthWrite connects building managers with NYSERDA-approved contractors that can make the energy improvements.

“What we are providing with NorthWrite MBCx is a service,” said Terrence McManus, NorthWrite’s chief marketing officer. “Building managers could attempt to use these tools independently, but they do not have the time to learn what all the data means. They are already short-handed and responding to tenants needs. This turn-key service makes it easier for them to move forward with energy efficiency measures that provide a quick pay back.”

So that’s one example of an attempt to make it easier for businesses to pursue energy efficiency. I’m guessing there are many similar stories out there. Do you have one? If so, please post it in the comment section here, or email me at elisa@realenergywriters.com. I’d like to use this blog at a future date to highlight non-MUSHY innovations that are drawing the elusive business market toward energy efficiency. Look forward to hearing from you.

Elisa Wood is a long-time energy writer whose work appears in many of the industry’s top magazines and newsletters. She is publisher of the Energy Efficiency Markets podcast and newsletter.

Share.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

Join the Conversation